Update on Sequestration

Sequestration appears likely to take effect as scheduled on March 1. While this seems assured, implementation across federal agencies is far from clear. Under current law, the Department of Defense will face a 7.3 percent cut across all programs, while non-defense agencies will face a 5.1 percent cut. The agencies do not currently have flexibility in implementing cuts, meaning the reductions would come evenly from every account, including personnel and grants. In a recent letter to Sen. Barbara Mikulski, Deputy Secretary of Commerce Rebecca Blank provided details on how sequestration could affect the agency. Among many program details, Dr. Blank indicates that all EDA employees could be furloughed a total of 6.5 days during the rest of the fiscal year. NADO members should be prepared for a reduction in grants and the possibility of reduced staff at EDA regional offices. You can view the complete text of Dr. Blank’s letter here.

Currently, Federal agencies are working on implementation plans to address sequestration. This week, the Department of Homeland Security announced that furloughs would be necessary under current law, which could lead to personnel at border crossings and airports working modified schedules. The Department of Defense announced that its 800,000 civilian employees will be furloughed one day per week for the remainder of the fiscal year, which ends on September 31, 2013. Negotiations between the White House and Congress have not made substantial progress toward averting sequestration completely, but members have been working on plans to provide more flexibility to federal agencies. Such flexibility would allow agencies to shift money between accounts to save the most critical priorities from the spending cuts. This could be used to prevent employee furloughs in critical areas. This flexibility could allow the Defense Department to prevent cuts to the operations and maintenance of our fighting forces. The Department of Homeland Security could use it to prevent furloughing TSA and Border Patrol agents. The other federal agencies have not released detailed plans.

While it remains unlikely that any agreement will be reached before the March 1 deadline, Members of Congress have stated that the expiration of the Continuing Resolution on March 27 is the more important date. Sequestration will take several weeks to implement, so leaders in both parties have indicated that if a compromise is reached by March 27 as part of another CR, than the worst effects of sequestration can be avoided.